Improving the value of your small law firm – (not) speaking to PII brokers

It takes on average about 4 weeks to sell an accountancy firm. It takes considerably longer for law firms to sell. As a result, our listings are always overloaded with law firms, with the occasional accountancy practice appearing. Once you list a firm of accountants with us, we will usually have enquiries for you within 48 hours, initial disclosure completed within a week, meetings arranged within 2-3 weeks and a first round of offers within 4 weeks. These will usually be at ‘good’ or ‘exceptional’ levels, which also means that very often one of these is accepted without needing to return to stage 2, which is to explore alternatives as they come in. Usually we will get an additional wave of enquiries between 2 and 6 weeks which opens even more doors for potential sales.

Law firms are very different and take a lot longer to sell – mainly because of the various stumbling blocks along the way – regulatory & professional indemnity insurance issues are the main two. If accountants think they are heavily regulated – try being a solicitor in England & Wales!

Yes we do – our valuations are based on current deal experiences and suggested deal structures. We recommend having a valuation prior to listing your firm for sale. It can be completed within 2 weeks for most businesses.

No is the quick answer and no is the even longer answer. In the UK anyone can set up as a business broker to buy and sell businesses. There are quite literally 100s if not 1000s of individuals, businesses, estate agents, accountants and lawyers who assist with the sale and purchase of businesses. There is no regulation of business brokers at all, although essentially the services most provide are simply advertising and marketing assistance, rather than any actual professional advice.

The business broker and business transfer agent market in the UK has some really dodgy operators in it. A couple of the more regular tricks are below:

1. The small print – there are quite literally hundreds of articles and complaints on the internet about some of the larger and more sophisticated sales operations out there who have armies of agents cold calling businesses to see if they want to sell. The most common clause is the exclusivity one. You sign an agreement with a broker and then if you end early or sell elsewhere you pay them an administration fee. www.cebta.org.uk has links to actual cases and examples that have arisen, involving some of the more dodgy firms.

2. The high valuation to entice a signature. This is a real problem for us – we have clients who have paid for a valuation, which we think is off the scale in ridiculousness, but the client is convinced that the valuation is genuine and insist on a sale at that price. Unfortunately the valuation is a complete waste of time and has been prepared for one reason only – to sign the seller up on an exclusivity contract for a period of time and take fees for various services.

Obviously our company is a little different! We charge no upfront fees and neither do we tie any of our clients in to exclusivity contracts. We are naturally delighted if anyone sells or merges without our assistance and we provide any additional advice to all our sellers and buyers at no cost.

Owners of law firms and accountancy practices can be assured that any data sent to Jonathan Fagan is kept highly confidential. We never release any information about your business without your express consent in every circumstance and we do not divulge any detail to third parties. The only information ever disclosed to buyers about sellers is the paragraph of information displayed on our website. Anything else requires the specific consent of the seller.

All buyers and sellers sign a non-disclosure agreement at the start of the process and we renew these with potential buyers every 12 months.

We are Cyber Essentials accredited. Our sister companies Ten-Percent.co.uk Limited and TP Transcription Limited are Cyber Essentials, Cyber Essentials Plus and ISO 27001 accredited respectively. We are registered with the Information Commissioner’s Office as data controllers.

Our IT system is constantly updated, our computers are protected by a high spec Draytek firewall and Panda anti-virus software, and our website is protected by security software.

Jonathan Fagan Business Brokers Limited is part of the Ten Percent Group of websites, which include legal & financial recruitment services.

Yes we do, as part of our Platinum Plus service.